Symantec raises subscription rates

Symantec quietly increased subscription renewal rates for its entire line of security products at the end of last month, citing the rising cost of fighting viruses and other malicious code worldwide.

The company is upping subscription renewal rates by $US5 on all of its products. That means users of the company’s popular $US50 Norton AntiVirus software will pay $US19.95 for each additional year they download virus definitions.

While previous rate increases have drawn the ire of users, Symantec executives said they are confident customers will understand why they’re increasing prices. The hike comes just days after the company announced it would include piracy-fighting product activation tech­nology in all of its 2004 consumer products.

Symantec has employees on duty around the clock watching for the next virus to appear, and that costs money, one of its product managers, Del Smith, said.

“We have research centers in North America, Asia, Australia, and Europe,” he said. “As soon as they see a new threat they begin delivering new protections.”

And the volume of threats was ever increasing, he said.

For example, in August 2002 Symantec received 90,000 files from Norton AntiVirus owners running the software’s Scan and Deliver service, which sends suspected viruses to the company for analysis.

Just one year later, in August 2003, the number of suspect files will top 130,000.

Symantec’s software currently protected users from more than 60,000 known viruses, Smith estimated.

Detecting new viruses is only the first step. When the company identifies a new virus or worm, staffers quickly begin developing a new definition file so that Norton AntiVirus software can detect the threat. Owners of the software download the new definitions via the subscription service.

The company’s other security products, including utilities and firewall products, also required frequent updates, Smith said. Symantec staffers were constantly beefing up their products with everything from new URLs for Internet Security’s Parental Control features to new updates for various firewall packages.

Over the years the company had also made significant investments to improve the way it creates these updates and then gets them to customers, Smith said. Today, most Symantec products automatically download and install these updates behind the scenes, without bothering the customer at all.

“To fund these services, and to allow us to continue to invest, we’re raising prices,” Smith said. The price increase affected buyers in all countries except India, Japan, China, Taiwan, and Korea.

All of Symantec’s products include an initial subscription. If you buy the product at retail or online, a year’s subscription is included. Versions that ship on a new PC or other hardware usually include a three-month subscription.

While each program will continue to operate after the subscription period ends, it won’t work as well without the latest updates.

“It’s important for users to keep up those subscriptions because it protects them against the latest threats,” Smith said.

This is the third subscription price increase in as many years for some Symantec products.

Antivirus software and subscription renewals can be pricey, but most users now understand it can cost even more to go without it, principal analyst with the Enderle Group, Rob Enderle said.

He suggested that losing your hard drive to a virus would cost considerably more than $US20.

Symantec isn’t likely to lose many customers over the price increase, but combined with the decision to include product activation on all of its 2004 products, the company risks aggravating it customers one time too many.

“Now that Microsoft is moving into antivirus, this process of continuing to aggravate the customer may come back to haunt this company,” Enderle said.

In June, Microsoft announced plans to offer antivirus protection in future products. This would most likely be included in future versions of Windows, such as Longhorn, due in 2005, he said.

Users irritated by Symantec’s pricing and product activation decisions may decide Microsoft’s protection was good enough.

Symantec executives aren’t worried, however.

“We believe our pricing is comp­etitive with what others are offering, and we also believe that the technology we provide offers the best protection in the market today,” Smith said.

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